Many super funds have recently sent letters to their members explaining that insurance premiums will be going up from July.
Have you received one of these letters? Did it clearly explain how much exactly your premium will be going up?
If you’re happy to share the letter/email you have received with us, we would be very interested in having a look. So far, we have received letters from AustralianSuper, UniSuper, PSSAp and Australian Ethical.
We would be particularly interested in seeing letters from any other funds. Letters/emails can be forwarded to email@example.com
We wouldn’t use any identifying details from any letters we receive in any story, we’re just interested in seeing the letters and ensuring super funds are clearly communicating these important changes to their members!
Can’t help with any other funds, but I have received one from Australian Ethical, along with another one saying that my insurance premiums would be stopped if I didn’t put any money in in the next 2 months (I’ve made no contributions for quite some time due to being unemployed).
I had a very clear one from Australian Ethical that laid it out both per unit and per year. So no problems there
Tweeted the report. Hope it sparks some interest for those affected.
I wonder since superannuation in effect is a social retirement system, whether the super funds should disclose what their cost for insurances are (how much it costs them to purchase the insurance by the super fund)…and how much they are charging each individual member. It could look a bit like other sectors of the financial industry where fees or margins above the cost of the service/product to the consumer is disclosed so that consumers are fully aware of the fees/charges to provide the service.
If this was done for in superannuation insurance, one could see whether cost and increases are a result of the bulk insurance cover purchased by the super fund, or through the added fees and charges of the super fund. This would improve product disclosure and possibly reduce creaming of the insurance premium by those who provide it.
Great idea, I’ve passed it on
From an article linked in the premiums rising article:
they’ll change three things about super from 1 July 2019:
- Super funds will be banned from charging you an ‘exit fee’ if you transfer your account (or part of your account) to another fund.
Does this ban on exit fees also apply to transferring part of your account balance to your own bank account rather than another fund?
In June I transferred a few thousand dollars from my super to my bank account and was charged 1% of it as an “exit fee”. Needless to say, I wasn’t happy about that!
If you create a SMSF fund then it would apply but not sure about just a bank transfer as that is considered a withdrawal from Super rather than a transfer under the Super Act. If you have retired from FT work you could withdraw part of your Super possibly without penalty but you would need to talk to an expert on Super about that.
I’ll have to ask Aust Ethical about it. I can withdraw money as I’m old enough and currently unemployed… which I suspect will eventually turn into retirement given the lack of suitable employment opportunities.
I’ve made several lump sum withdrawals to my bank account from two different super funds. I am past preservation age. There were no exit fees. One was an industry fund.
It does seem unusual. The law was changed as you noted to ensure transfers were fee free, mainly as an aid to consolidating small and stray super accounts. There is no mention of this also applying to lump sum withdrawals.
Some of the previous investments I held did have exit fees under certain conditions, including one super product. The PDS for the super product and guide should hold the answer. Sometimes there are internal exit fees to take funds out of a specified investment type and transfer them to a cash account, before they can be withdrawn?